Martin Kimani
12 October 2008
column
Nairobi — The state is on the march globally, its mission: Save financial markets from collapse.
And the markets, far from struggling against regulation and intervention, are rushing into the state's arms for safety. Adam Smith's invisible hand appears palsied and the free market ideologies can scarcely be heard above the capitalists' screaming lunge for the taxpayer's money.
For the past two decades, a quiet but important ideological war has been waged over whether the citizen or the consumer shall drive the economic life of nations. The present crisis has brought the struggle to the surface.
When the Soviet Union fell, exponents of market neo-liberalism pronounced the producer-consumer tandem had won and that we had entered a post-political age.
Such was the paralysis and demoralisation on the left that it watched the citizen -- whose hopes can only be realised in politics -- take second place.
For us in East Africa, the present crisis presents a brief opportunity to return politics to centrestage, where it does not merely serve as a cowed handmaiden to the corrupt ruling class that dominates our economy.
Last week, central banks in the US, Britain, Canada, Switzerland and Sweden made co-ordinated interest rate cuts as they tried to inject confidence into a global financial system that has run out of it.
China followed suit, while countries as far away from Wall Street as Russia, Australia and Iceland joined in pumping hundreds of billions of public dollars and yen and euros into money markets to maintain liquidity.
European savings account were given blanket guarantees by several governments; and the US Federal Reserve went as far as to consider lending directly to businesses that are unable to turn to risk-averse banks for loans.
Despite these unprecedented reactions by central bankers, share markets tumbled as companies were caught between a slowing economy and fears of a potential collapse of the financial system.
Japan's Nikkei 225 index led the way with a 10 per cent haemorrhage last Wednesday. British shares followed, resisting the government's increasingly desperate moves to guarantee bad bank loans and its intention to partially nationalise the banking system.
The very interrelatedness of the financial markets, we were assured, was supposed to efficiently deliver capital to competitive businesses and regions; it was to be the engine that would drag the poor out of their sorry lot.
Governments in this view needed to stand aside -- at best, they could facilitate liberalised financial systems but were likelier to get in the way with their inefficiencies. That was then, a mere few months ago.
Now, the markets are delivering fear, financial meltdowns and recessions.
In America, Republicans and Democrats are trying to outdo each other in their promises to regulate and punish corporations that today they call greedy but which a short time ago they praised for being innovative and virtuous.
They, like other politicians in the West, have been caught with their pants down, lacking a vision beyond the "Third Way" straitjacket they squeezed into throughout the 1990s.
From Bill Clinton's presidential campaign in 1992 to Tony Blair's victorious 1997 New Labour and Gerhard Schroeder's Social Democrats triumphing in 1998, centre-left parties in the West lurched rightward, reaching out for the invisible hand.
Governments' responsibility was now to oil the competitive mechanism in markets and to modestly trim the social or economic harm from capitalism's creative (and painful) destruction of the uncompetitive, the inefficient and the unprofitable.
Capital was to be allowed freedom to pursue ideas and resources wherever it wished.
The old left of pre-1989 days had to all appearances lost the fight against capitalism; history had ended with a knockout in the 15th round. The best the left-leaning parties like Labour could do was clinch their opponent tightly and hope for an electoral draw.
The conservative right, that creature descended from the Western bourgeoisie, knowing that it had won, has tried to muffle its crow of triumph in the soothing sounds of compassionate capitalism -- the capitalist would be let off the leash and any resulting depredations would be soothed by your local church group and its donations kitty.
Politics was dead and ideology was nothing but foolish illusion. The radical action of those who wished to be citizens had brought European colonial empires crashing down and before them the monarchies and feudal lords of Europe.
But the citizen was now being ushered off the stage. In this new world of competition and development, the consumer alongside the producer would reign supreme. The politician approached on bended knee.
This could not have been clearer than in George Bush's encouragement to Americans to go shopping as the best immediate response to the Al Qaeda attacks of September 11.
Patriotism was flashing a credit card, which of course was one way of saying that patriotism was supposed to protect America's treasure as much as its blood from Osama's assaults.
In our part of the world, the Washington Consensus held sway. Hardly an East African leader has made a speech on the economy in the past two decades without promising deregulation and begging for foreign investment.
The former, we were assured repeatedly would lead to the latter; China and the Asian Tigers were incontrovertible proof that the deregulate-and-get-rich formula was hewn from rock.
Neoliberalism was not ideology, went the cry from Kibaki on down, it was pragmatism -- a response to "things as they really are" with the most tried and trusted policies.
Ideas did not matter, or rather ideas that we debated and hashed out did not matter. What our leaders do well is import fully shaped orthodoxies, be they regulation or liberalisation or anything in-between.
Nowadays, economic policy-making involves a flight to Singapore, taking in PowerPoint presentations from a Lee Kuan Yew acolyte and then rushing back to "apply" the lessons from Nairobi to Kigali. Our politicians, when they are not being tribal warlords, like to present themselves as managers and to talk of their countries operating like multinationals with millions of citizen-shareholders.
However, this ideology, like the self-serving "African Socialism" of yesteryear, is dependent on its proponents' awareness of the gap between their universalist claims on its behalf and their class interests.
They are Peter Sloterdijk's "cynical subject" who is well aware of the brutality and violence and greed for unchallenged power hidden beneath the benign sounds and promises of ideology.
I too called for deregulation and liberalisation on these very pages, for the state to get out of the way of the ordinary Kenyan, in the belief that it would help break the murderous hold of the corrupt ruling class that has used the state to consolidate its power in the name of developmentalism.
Instead, liberalisation became the ticket to the original gangsters getting even richer alongside a small and meritocratic group of managers.
They had used the old state-owned assets to maintain political power through patronage; they then pounced on them during privatisation.
Either way, the sea of poverty kept rising. What made this new chapter of oligarchy different and possibly even more dangerous than the old one was that it embraced the death of politics represented in Europe and the Americas by the Third Way and neoliberalism's "end of history" triumphalism.
Locally, this move to eject the political, or at least marginalise it, did not come with those kinds of sophisticated trappings.
It was achieved by turning up the volume on development as a sphere dominated by the technocrat and not political debate.
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